CHAPTER 3 Pareto's Principle
Chapter 3: Pareto's Principle – The 80/20 Rule “Eighty percent of results come from just twenty percent of the action.” Sounds like something you'd see on a motivational poster in a corporate office, right? Well, it’s actually the Pareto Principle, named after Italian economist and philosopher Vilfredo Pareto. Back in 1906, Pareto observed something curious in his garden: 20% of his pea plants were responsible for 80% of the healthy pea pods. It didn’t stop there. He soon realized that this 80/20 distribution wasn’t just limited to peas—it applied to many areas of life,
from wealth distribution to business productivity. Pareto’s rule, often called the “80/20 Rule,” is more than just a fun math fact—it’s a concept that can help make your home- selling process way more efficient. And who doesn’t want to sell faster and for a better price? To be clear, the 80/20 rule isn’t always an exact science (sometimes it’s 70/30 or even 90/10). But this general imbalance
often shows up in a variety of real-world scenarios: • 20% of sales reps generate 80% of total sales • 20% of customers account for 80% of profits • 20% of software bugs cause 80% of crashes
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